Supermarket bias masks Aussie progress

5th June, 2014 by Gabriel Stone

A leading figure in the Australian wine industry has hit out at what he perceives as an excessive focus by commentators on the country’s supermarket performance, arguing that it distracts from the efforts of the vast majority of producers.

Speaking to the drinks business, Robert Hill Smith, co-owner of Yalumba and its export arm Negociants, called for a broader perspective on Australia than its ability to compete at the supermarket entry level.

“Supermarkets are happily supplied by a handful of commodity producers,” he remarked. “To speak of the entire Australian category as a sub-£5 race to the bottom is to write off what the other 2,500 winemakers do to elevate standards.”

Although in volume terms UK supermarkets account for around 80% of off-trade wine sales, Hill Smith maintained that this sector represents only a very narrow view of Australia’s abilities, overlooking the premium message sent out by the generic A+ Australian Wine campaign, which launched in 2012.

“People want to write about Australia as a one trick pony when for the last three years all of us have been investing and educating the trade and public that Australia can do £20 wines as well as anyone else in the world,” he said. “That’s really our future – there’s no way with our cost framework that we can make a future with being the best in the sub-£5 category.”

Indeed, he continued, “what’s good in Australia is not necessarily going to be accurately reflected in what’s going on in the high street or discounters. Where Australia is focusing its message is the on-trade and independent off-trade around the country.”

For Hill Smith, that message is “about getting free thinking consumers to buy into the fact that there’s quality they can enjoy at serious price points.” In his view, “the only way we can make headway is by people pouring these wines and making listings which support that belief system.”

In particular, he stressed the importance of Australia’s ability to make further progress in the on-trade, with its first challenge being to win over the trade in this sector.

“There are some innovative sommeliers and buyers in the on-trade who are showing people what Australia is doing: wines that are still affordable but not sub-£10,” he observed. “People who have been on trips in recent times have been a bit more open to giving Australia space in the on-trade, which is great.”

His comments were echoed by Simon Thorpe MW, managing director of Negociants UK, who confirmed: “There’s a bit of a tail wind in the on-trade now. Lots of sommeliers are willing to experiment and put on Australian or New Zealand wines that have a purpose and a story to them.”

In his view, “the next step – probably the biggest step – is at the places where we need to be pushed by sommeliers. Why would a classic London restaurant goer pick a Tasmanian Pinot Noir? The key thing is that we are getting more opportunities to have these wines on the list, but we are quite a long way behind the US in terms of the on-trade.”

Despite this recent progress, Hill Smith acknowledged: “Australia has always under-indexed in the on-trade around the world; it’s always been an off-trade story. We have to get ourselves into that dining theatre.”

Highlighting the gap that remains between Australia and its Old World competitors, he maintained: “An unknown Pouilly Fuissé, even in a market where Australia has a good reputation, will always sell 10 times faster than an Australian Chardonnay.”

Hill Smith also drew attention to a challenge facing Australia in the UK pub sector. “One thing still holding Australia back a little bit is that every pub has an Australian wine of some sort, but you can rarely go to two pubs in 20 that would have the same Australian wine on the list,” he remarked. “In terms of elevating the proposition you can’t ever build any familiarity or confidence about what you’re going to get.”

In conclusion, Thorpe offered an overview of the message Negociants aims to send out with its own portfolio, which in addition to Yalumba and Hill Smith’s Tasmanian ventures Jansz and Dalrymple includes brands such as Vasse Felix, Jim Barry Wines, Oxford Landing and Brokenwood

Marking a contrast with the perceived commoditisation of major supermarket brands, Thorpe outlined: “We would like to try and differentiate first to the trade and then consumers that there is a place, these are not factory wines, there is care and attention.” In order to avoid undermining this position, he insisted: “You have to play a long game; you must not cut corners; don’t sell at half price.”

One Response to “Supermarket bias masks Aussie progress”

Well said. I applaud the French for having a firm hold in the UK on the luxury wine market in the restaurant trade. Possibly more blind tasting needs to be done with these wines and equivalently priced Australian wines is a simple way to show who shines in the consistency of value stakes. With the supreme quality of modern cool climate Australian Chardonnays at the moment I know where my money is…